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Thursday, July 16, 2015

Five years and 3 bailouts later, it's amazing that the leaders in Europe haven't made any progress in this long and painful odyssey of pulling Greece out from hell. Everyone had their fair share of blame. The latest instalment this year from May-Jul 2015 started with Alexis Tsipras, the Greek PM who thought that he was King Leonidas, went to the negotiating table with the European Union (EU) demanding money and yet promising no reforms. Essentially reminiscing the unforgettable scene from the comic based comical epic movie: 300, released in 2006.

This is Sparta!

For the un-initiated, the scene was about how a Messenger from Persia came to negotiate with King Leonidas of Sparta, that if he was willing to be subjected to the rule of Persia and the god-king Xerxes, his country will be spared from bloodshed. King Leonidas refused to kowtow and bellowed the famous words, "THIS IS SPARTA!" and pushed the Messenger into a bottomless pit.

In the Greek tragedy unfolding today, we also see Tsipras shouting in a similar tone to his counterparts in EU. Essentially demanding respect and refusing to kowtow to the whims and fancies of the likes of modern-day aggressors. Sadly, Greece today is not Sparta. Greeks today have zero will to train hard to climb out of the bottomless pit of debt but chose instead to rely on its ridiculously generous government pension system to live on borrowed money indefinitely.

To give a flavour of the system's atrocities, Greek pensioners get to retire at 50, draw a monthly pension of roughly 2,000 Euros (c.S$3,500) per person per month for as long as they live. That's part of the reason why employment rate is 25%. Unsurprisingly, close to 3m Greeks out of a population of 11m lives on pension and the Greeks spend a whopping 20% of its GDP on pension. This is the highest ratio even the EU and perhaps even globally. Singapore spends like $20 on pension?

No wonder the rest of EU is upset that Tsipras has the cheek to come back and ask for more money while achieving nothing. And when he didn't get what he wanted, he started playing games with EU ultimately culminating to the scary referendum in his country. That was the same trick that his predecessor played. He was probably thinking if the Greek voted YES, then he could give in to Europe and be hailed as hero for keeping Greece in the Eurozone. If they voted NO, he would use that as a bargaining chip to maintain Greece's crazy pension on top of asking for the scale back of other tough austerity conditions imposed by the EU during previous bailouts.

Well, that didn't work. EU caught his bluff. Now, the Greeks voted NO, but the reforms just got harsher! Bcos Greece met it's match - Artemisia, in the form of Germany's female chancellor Merkel. This lady is ruthless. She humiliated Tsipras and Greece by forcing harsher conditions including securitizing Greek national assets, possibly including the kingdom of Sparta and the infamous bottomless pit at its townhall, in a $50bn fund for future payment in the event that Greece did not reform. This is akin to Singapore selling our Merlion to pay debts for 1MDB (oh yah, should be Petronas Towers). It was too much. Merkel became Europe's enemy overnight.

Artemisia, well... protrayed here not by Merkel but Eva

But the financial markets were just relieved that Grexit did not happen and the party continues, oblivious that this was just kicking the can down the road for another 2-3 years even if it passes through all the respective parliaments in the next few days (Greek passed theirs). The ordeal continues, Odysseus has yet to meet the Sirens. So we are now left hanging at the cliffhanger moment. Again.

Can Greece muster enough will to reform after failing twice in five years? The odds are definitely against them. It's like giving a drug addict three years worth of drugs after which he must promise to quit. Will he really quit after three years? Yeah... right... So far, Greece had failed to live up to that promise. Despite all other alphabets of the original PIGS actually doing it (Portugal, Ireland and Spain). Grexit might really be the Hobson's option. In fact, Merkel and Tsipras fought it out last weekend (or as we would prefer Leonidas and Artemisia) and it nearly didn't come to this. The world would be very different today if Grexit was the conclusion last Monday.

Well, we might have that in 2018 and hopefully by then perhaps Europe would be ready for that. Sort out the laws for Grexit, get ready the printing machines for the new Drachma, humanitarian aids and supplies ready to help as the country implodes. It would be a sad day. A micro Great Depression just for the 11m Greeks. It would then really take Spartan philosophy to get the country back into shape.

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